Sometimes the markets get away from me…

Peter Brandt: another fake trader

This is a draft, originally written in 2016. Will be completed when the last few bits of evidence are in my possession.

Finding fake traders in the financial twitter universe (FinTwit) is like trying to find hay in a haystack. (Yes, you read that correctly.) Of four suspicious accounts examined so far, all have misrepresented performance and experience. All but one could be (read: should be) sued for fraud — I haven’t spent as much time investigating the one. However innocuous FinTwit is to the average Twitter user, there are real financial dangers when one trusts people like Peter Brandt (@PeterLBrandt) and Dan Zanger (@DanZanger) for trading advice. (I’ll refrain from mentioning the other two — don’t want them deleting public information to cover their tracks, as both Brandt and Zanger have done.) As much as they say “no trading advice is given,” it is absolutely implied and is in fact a cornerstone of their marketing approach. More on this a bit later.

Peter Brandt is one of the most obvious examples I have found in the short time I’ve done real “due diligence” research. After spending a total of five or six hours digging through public information, I easily uncovered some whoppers in his story. Reinforcing this pattern is unnecessary, blatant lying by Brandt in email correspondence between me, Brandt, his alias Melker, and Jolleen Oleson. The latter is listed on the Factor website as an employee. I believe she is a commissioned marketing agent who promotes his service. He deliberately tries to create a perception of legitimacy by including his alias (Melker) and Oleson on the CC line in emails, referring to them as his staff. If he can present the illusion of having an office of busy assistants fully dedicated to handling his administrative affairs, prospective clients are more likely to buy into the myth he has been busy cultivating since the early 1980s. Suffice to say: Brandt has no employees.

1. In the beginning

I could not learn much about Brandt’s early years. I’m still researching, but emails and phone calls often go unanswered. Letters take take time, if they are answered at all. Many of the companies Brandt claims to have worked with have long since dissolved or been acquired. What I do know is this: Brandt claimed in his book to have worked for hedge funds around the same time he settled with the NFA for providing “misleading and deficient promotional material”, in addition to violating several other rules. Summary below:

2. The Independent Accountant’s Report on Applying Agreed Upon Procedures

Up until a few weeks ago, Brandt claimed on www.PeterLBrandt.com to have an 18-year audited track record and more than 40 years of experience. This is a lie. I stated this on Twitter several times, using the term “Letter of Attestation” to describe the actual product, in order to see how Brandt would react. The document verifies figures based on “agreed upon procedures” — which is just another way of saying, based on how the client defines the terms of the engagement and with the data the client provided. I’m flattered that Peter Brandt himself would adopt the same term I used in my Twitter rant. This does not change the fact that he tries to pass off a rate of return (“ROR”) of 40% per year for 18 years as legitimate. The letter is not an audit from a CPA, as he originally claimed. The annual return of 41.6% is also not legitimate. Not even in the slightest! More on this later.

This nutty deceit is not a simple one-off misunderstanding, or any other sort of whoopsie-daisy moment. It is very much a deliberate effort, with forethought, to deceive people like you and me. From the limited information available to me, it is part of a pattern of behavior that dates back to 1987. This pattern is still in operation today! It defines the core of Brandt’s marketing approach! Just…GAH…people!

Here is the main paragraph describing the findings of the letter:

I exposed on Twitter a number of months ago that Peter’s audit is merely a Letter of Attestation. A few months ago I contacted Stockman Cast Ryan and Co., the CPA firm that wrote the Letter of Attestation. I spoke to the head of their audit department who confirmed that Stockman does not regard a Letter of Attestation to be an audit, and that , he has edited his site to read, “Account Attestation annual ROR: 41.6%.”

He explained gaps in his track record as being due to his pursuit of “full time, not-for-profit endeavors.” In his book, Diary of a Professional Commodity Trader, he writes, “A good mosaic becomes visible only in it’s entirety.” The real mosaic is presented in the storyboard below.

, which will be detailed in another post.

Alas, just as astonishing as people like Brandt are the “reputable” Twitter personalities wanting to affiliate. Many of these reputable people claimed to be professional traders in the past. Some have backed off from the claim and recently re-branded themselves as “analysts” or “strategists”. They legitimately work with a large network of introducing brokers, vendors, and guru traders like Peter Brandt to build their businesses. These people stand to gain financially through such endorsements, believing in the benefits of participating in the virtuous circle of affiliation with top FinTwit accounts.

Done the right way, I believe affiliate networking has the potential to be truly virtuous for everyone. It is an excellent business model that is also easily corrupted when driven by a curious confluence of venality, apathy and other ubiquitous character flaws characterizing the FinTwit universe. Analogous to the fraud of using a falsified trading record to gain subscribers, these prominent FinTwit promoters never inform loyal followers of the potential damage and risk inherent in their promotion of people like Brandt after the facts are known. When confronted, they engage aggressively in virtue signaling with tropes like, “Cooperation is better than confrontation,” and, “Positivity is better than negativity.” Given stark facts are known, one must conclude their motivations are not based in practicing at cooperation or optimism, but in protecting their revenue streams and reputations. They usually remain stain-free, but should in fact share directly in the culpability. They are at best negligent and at worst a willing accessory to the fraud. (I will devote another blog post to the worst of the serial affiliate offenders, like @SJosephBurns and @ChatwithTraders.)